Eli Lilly inks $63m deal with Sigilon to develop encapsulated cell therapies for diabetes

Eli Lilly (NYSE:LLY) plans to put $473 million on the table to fund a collaboration with Cambridge, Mass.-based startup Sigilon Therapeutics, the insulin-maker reported today.

The goal of the newly-established partnership is to develop encapsulated cell therapies to treat Type I diabetes.

In patients who suffer from Type I diabetes, pancreatic beta cells are killed off by the immune system. Lilly and Sigilon plan to encapsulate induced pluripotent stem cells that are engineered into insulin-producing pancreatic beta cells. Ultimately, the companies hope, these products can restore a person’s insulin production without alarming their immune system.

Sigilon’s encapsulation tech, called Afibromer, was developed at the Massachusetts Institute of Technology under the leadership of serial entrepreneur Robert Langer.

“At Lilly, we endeavor to change the frontiers of what’s possible in medicine, both through our own scientific labs and in collaboration with other leading researchers,” Dr. Daniel Skovronsky, senior vice president for clinical & product development and incoming president of Lilly Research Labs, said in prepared remarks. “We are excited to be collaborating with, and investing in, Sigilon as they seek to develop encapsulated cell therapies, a potentially disruptive technology that could result in meaningful clinical advancements for chronic diseases such as Type I diabetes.”

According to the terms of the deal, Sigilon will fork over an exclusive worldwide license to its Afibromer technology for islet cell encapsulation and will receive an upfront payment of $63 million. Lilly is also slated to make an undisclosed equity investment in the company.

Sigilon could also make up to $410 million in development and commercialization milestones. Under the agreement, Sigilon will take on the costs of development until it submits a new drug application to the FDA. After submission, Lilly assumes responsibility for all clinical development and commercialization activities and costs.

“We are very pleased to partner with Lilly, a worldwide leader in diabetes care, as we seek to apply Sigilon’s game-changing technology to the area of insulin-dependent diabetes,” Sigilon CEO Paul Wotton added.

“At Sigilon, published studies have shown the ability to overcome the immune foreign body response with our proprietary Afibromer technology. This holds the promise for the creation of state-of-the-art allogeneic cell factories to be transplanted into patients, without the need for immune suppression. Our cell engineering and delivery system-based platform may allow us to program and control dynamic protein delivery for the long-term treatment of debilitating diseases,” the chief executive said.

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